Question

A company has the following accounts receivable and estimates of uncollectible accounts: Accounts not yet due = $61,000; estimated uncollectible = 4%. Accounts 1-30 days past due = $27,000; estimated uncollectible = 15%. Accounts more than 30 days past due = $162,000; estimated uncollectible = 40%. Compute the total estimated uncollectible accounts.

Answer 1

Answer:

The correct answer is $71,290.

Explanation:

According to the scenario, the computation for the given data are as follows:

Accounts not yet due = $61,000

Estimated uncollectible = 4%

So, Total uncollectible for Account not yet due = $61,000 × 4% = $2,440

Now, Accounts 1-30 days past due = $27,000

Estimated uncollectible = 15%

So, Total uncollectible for Account 1-30 days past due = $27,000 × 15% = $4,050

Similarly, Accounts more than 30 days past due = $162,000

Estimated uncollectible = 40%

So, Total uncollectible for Account more than 30 days past due = $162,000 × 40% = $64,800

Hence, the total estimated uncollectible accounts = Total uncollectible for Account not yet due + Total uncollectible for Account 1-30 days past due + Total uncollectible for Account more than 30 days past due

By putting the value we get,

= $2,440 + $4,050 + $64,800

= $71,290